Landowners, what % of your net worth does your land equity represent?
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H20fwler
5 year old buck +
For me maybe 10% or less? I didn’t buy them as a financial investment at all even though they have “assessed” a value to the county auditor for greater than I paid.
The value of the farms to me is almost immeasurable in the joy I get from hunting and doing projects, or just sitting out there chilling out.
The thought of handing down the property to my children and grandchildren so they will have a place to hunt/fish/spend time gives me peace of mind that is almost priceless to me.
Not to say my retirement account doesn’t also give me awesome peace of mind being a few years away from that. It is the lions share of my personal portfolio, also have a couple other residential properties that I consider liquid assets.
Buying more hunting property for yourself should not really ever be a burden, it should be something that makes you look to the future and keep you busy planning.
Land around here is getting harder and harder to come by like everywhere else. If you have an opportunity don’t just look at the financial value of it look at the benefits you and your family will get from it.
The value of the farms to me is almost immeasurable in the joy I get from hunting and doing projects, or just sitting out there chilling out.
The thought of handing down the property to my children and grandchildren so they will have a place to hunt/fish/spend time gives me peace of mind that is almost priceless to me.
Not to say my retirement account doesn’t also give me awesome peace of mind being a few years away from that. It is the lions share of my personal portfolio, also have a couple other residential properties that I consider liquid assets.
Buying more hunting property for yourself should not really ever be a burden, it should be something that makes you look to the future and keep you busy planning.
Land around here is getting harder and harder to come by like everywhere else. If you have an opportunity don’t just look at the financial value of it look at the benefits you and your family will get from it.
TreeDaddy
5 year old buck +
roymunson
5 year old buck +
I'm with swamp cat, unless something stupid happens, i have no intentions of ever sellling my place.
That said i'm probably about 20-30%, but I'm a bit younger and haven't earned my way out of it the way some guys here have.
If you can get it done, keep your marriage, and actually enjoy it, rather than it become a millstone and a burden, i say have at it.
If I never buy more hunting land, i'll be happy, but I sure hope I can at some point.
Another "cost" to consider, is will you have enough margin in your life (time and financially and physical bodily) to manage the land? Takes time to spray plots, cut trees, maintain equipment, etc
That's the fun part for me, and I could get away from doing a lot of it, but man do I love it. But changing blades on the brushhog, mowing around the cabin, keeping sufficient tools there for when stuff does break down, etc... Those cost you something either in time, money, or otherwise. Count those costs.
That said i'm probably about 20-30%, but I'm a bit younger and haven't earned my way out of it the way some guys here have.
If you can get it done, keep your marriage, and actually enjoy it, rather than it become a millstone and a burden, i say have at it.
If I never buy more hunting land, i'll be happy, but I sure hope I can at some point.
Another "cost" to consider, is will you have enough margin in your life (time and financially and physical bodily) to manage the land? Takes time to spray plots, cut trees, maintain equipment, etc
That's the fun part for me, and I could get away from doing a lot of it, but man do I love it. But changing blades on the brushhog, mowing around the cabin, keeping sufficient tools there for when stuff does break down, etc... Those cost you something either in time, money, or otherwise. Count those costs.
I'm with others about not worrying about net worth. Others have said these things as well, especially @roymunson above. Above all, this is a quality of life decision. How will it affect your marriage, relationship with your children, and your job and your sanity? My thoughts:
1. You mentioned you are young, which means you are younger than 63, and hopefully younger. Hopefully you have upside earning potential. Apply the adage of not getting "house poor" and don't get a payment that is a burden, but realize as your earnings grow, the payment is less of a burden.
2. You can always sell the land to get out from under it, but you never want to be in a position where you HAVE to sell, especially in a timely manner. If you see you're going to need to redirect cash flow when your oldest child is 15 and wants to go to Harvard, then you've got a few years to sell. (Your land, not your child :-) ).
3. Managing land is a time consuming chore. My buddy and I spend a day a week or more working it, and we will never be done! If you are as ADD as I am, you will be on the tractor to do one job, and stop to do another one that catches your eye on the way. How will this affect your being with your wife, at school and sporting events with kids etc.? Your kids can enjoy land well beyond hunting. There's motorcycles, horses, etc. It doesn't have to be a hunting preserve.
If you think it may take away time from your family life while not contributing anything, you could acquire it, visit it sparingly, and not work it as much until the kids get grown and gone. Leasing it and working with the folks who hunt it may help it get developed for you over the years. There are a lot of options of what to do with it, so like Roy says, if you can keep your marriage and afford the land, why not?
1. You mentioned you are young, which means you are younger than 63, and hopefully younger. Hopefully you have upside earning potential. Apply the adage of not getting "house poor" and don't get a payment that is a burden, but realize as your earnings grow, the payment is less of a burden.
2. You can always sell the land to get out from under it, but you never want to be in a position where you HAVE to sell, especially in a timely manner. If you see you're going to need to redirect cash flow when your oldest child is 15 and wants to go to Harvard, then you've got a few years to sell. (Your land, not your child :-) ).
3. Managing land is a time consuming chore. My buddy and I spend a day a week or more working it, and we will never be done! If you are as ADD as I am, you will be on the tractor to do one job, and stop to do another one that catches your eye on the way. How will this affect your being with your wife, at school and sporting events with kids etc.? Your kids can enjoy land well beyond hunting. There's motorcycles, horses, etc. It doesn't have to be a hunting preserve.
If you think it may take away time from your family life while not contributing anything, you could acquire it, visit it sparingly, and not work it as much until the kids get grown and gone. Leasing it and working with the folks who hunt it may help it get developed for you over the years. There are a lot of options of what to do with it, so like Roy says, if you can keep your marriage and afford the land, why not?
4wanderingeyes
5 year old buck +
If your family likes outdoor stuff, then it is a huge plus, because going to the hunting land, (cabin?) can be your weekend get away, and be able to spend time with the family. On the flip side, if they aren’t outdoorsy then it is just time away from the family.
Weedy brought up projects, and time away from your family. While you will make yourself an never ending list of projects, your land will be fine if you walk away from them projects for a weekend, month, year, or even ever.
You brought up timber value, if there is any that is ready now, that is positive money to start with, and it create great hunting, and opportunity for food plots, fruit trees, etc…
Weedy brought up projects, and time away from your family. While you will make yourself an never ending list of projects, your land will be fine if you walk away from them projects for a weekend, month, year, or even ever.
You brought up timber value, if there is any that is ready now, that is positive money to start with, and it create great hunting, and opportunity for food plots, fruit trees, etc…
Wind Gypsy
5 year old buck +
% of net worth isn't an overly useful metric IMO. 50% of 500k is a lot different than 50% of 10 million.
I'm in my mid 30's and just bought my first solely recreational land this year besides the 6 acres i live on. It's 1 hr from home and I'm already wanting to buy something similar in size in a location that I'd want to build a house on to avoid the 1 hr drive. At this point it probably makes more financial sense for me to buy income producing rental properties and be grateful for the house I already have. That said, I've got a running MLS search open in case that once in a lifetime lot comes available. There were good points made that its not that often the "right" property is available. The pace of development these days is depressing and I fear a lot of the types of properties I'd want to live on close to amenities will not exist for long.
I'm in my mid 30's and just bought my first solely recreational land this year besides the 6 acres i live on. It's 1 hr from home and I'm already wanting to buy something similar in size in a location that I'd want to build a house on to avoid the 1 hr drive. At this point it probably makes more financial sense for me to buy income producing rental properties and be grateful for the house I already have. That said, I've got a running MLS search open in case that once in a lifetime lot comes available. There were good points made that its not that often the "right" property is available. The pace of development these days is depressing and I fear a lot of the types of properties I'd want to live on close to amenities will not exist for long.
Thanks for the responses. I understand those of you that don’t like to look at your land as an investment. My counter to that notion is that I’d likely not buy hunting land (or as least not as much of it) if it depreciated like a boat or truck. That’s why I can’t help but look at these decisions through a personal finance lens.
Wind Gypsy
5 year old buck +
I absolutely think you're looking at it right in that regard. It's just that from a purely financial perspective you may be able to do better with your money elsewhere. I wouldn't want most of my financial eggs in that basket. That said, I see what's happening to land values around me in a traditionally rural area about an hr from Minneapolis and half hr from metro area. Some 40 acre parcels around here that were probably relatively affordable 2 or 3 decades ago are now worth enough for a normal person to retire off of.
My portfolio was pretty heavy in cash and crypto this spring and with rural property becoming more desirable as the world realized many employees can work remotely, inflation, and crypto volatility - land made a lot of sense as a portfolio adder.
rocksnstumps
5 year old buck +
Dont think hunting land or land in general is going to depreciate. Hunting land around me an hour or less from town has gone up in price a fair amount.......if you sell. Cash flow is a different topic. If you are thinking purely financial in the long term stock market has done better over say last 30 yrs. Will it continue, who knows but probably.
If you AND your family can enjoy the land, that's a life benefit beyond financial.
If you AND your family can enjoy the land, that's a life benefit beyond financial.
Even though some of us might not intend on selling our property, you still have to look at it through a personal finance lens. You have to be able to afford your property after all other necessities of life are taken care of first.
And then, when you get to my age, and one of your goals was to leave your land to your kids, all of your kids may not live in the area, and even if they do, one or more may not be interested in keeping the land. That is fine and good if none of them want it or all of them want it. But if only some of them want the land, are they going to have the financial resources to pay the other kids for the land. Do you intend on leaving them the financial resources so the ones that want to keep the land can pay off the ones that dont want to keep it. In effect, pay for your land twice.
Wind Gypsy
5 year old buck +
My spring Crypto sales paid for 40% of my August property purchase. If I would have sold in Summer they would have paid for 100% of my property purchase
All with what was a roughly $3k investment in 2017. It's a wild world.
bwoods11
5 year old buck +
Stock market overall. But I’d say land is my best investment. Remember if land goes up say 25-50-100%Your investment is what you put down, not the banks money.
Example … I bought a farm for $325,000
It’s appreciated to say $500,000. I put 25% down ($82,000) … if it increases by $175,000. I more than doubled my money. This has happened over and over, and that’s why my land assets are far higher than stock market assets. (Inflation helps, Thanks Biden )
I like a mix of both . Cash rent and dividends will be my retirement. Plus a business. The goal is to leave my land to my kids.
SD51555
5 year old buck +
The more utility you can get out of a place, the less it needs to be an investment. In my eyes, my place was never an investment, but a necessity of life. A guy like me has to have a place to go to get out of town, to hunt, wander, and get some dirt under his fingernails. If it weren't for my place, I wouldn't get any exercise or fresh air, and I'd have to spend lots of money to entertain myself. It costs me about $50 in gas to round trip it to my place each weekend. I'd eat whether I was there or home, so for a weekend in the woods, that's pretty damn affordable.
I'm also a fairly healthy eater, so when inflation hits food, I can tell exactly what's going on. A green pepper is always a green pepper, 8 oz of fresh mushrooms is always 8 oz of fresh mushrooms. I've been toying with different garden designs the past few years and I think I've about nailed the maintenance free-fertilizer free-tillage free-weed free garden. Most produce is going for $5/lb or more these days, and I go through a lot. I'm angling to eventually harvest can-able quantities of vegetables off my place, as well as fresh eating as long as the season allows.
I could easily offset my property tax bill just by growing my own vegetables. It doesn't take long when green peppers go for $1.50/ea or tomatoes are $6/lb, fresh peas $6/lb, cucumber $3/lb, Onions $2/lb, potatoes $2/lb etc. And that's benchmarking vs grocery stores. Farm markets seem to be 100% or more higher yet.
I put propane into my garage this fall so I can do food preserving out there. I Just wrapped up canning 24 lbs of venison a couple weeks ago.
Wind Gypsy
5 year old buck +
So have you been buying/selling a number of times to take advantage?
My business parter bought 300 acres in 2003 for $300K. He put $80K down when he bought, and paid $24,000 a year for 17 years, plus, he built a sturcture, some fencing, and a pond at $75k. He spent a total of $563k. This does not include annual expenses for maintenance, seed, fuel, power, etc. He did get some income tax deduction for interest paid.
He sold a year ago last summer for $625K. After taxes, and realtor commission, principal owed, he ended up with $475K. But, while not a great financial investment, he considers the time spent on his farm as invaluable.
He sold a year ago last summer for $625K. After taxes, and realtor commission, principal owed, he ended up with $475K. But, while not a great financial investment, he considers the time spent on his farm as invaluable.
Peeps
5 year old buck +
I only have 40 acres with a small house on it. I’ve never considered it an investment to make money off of some day. It does have some marketable timber. We got it as an investment in our family. We have had great times there as a family and gives my kids a chance to experience nature first hand. So the investment has really paid off. We will never sell it and the kids know it will be theirs when we shuffle on some day. When I retire in 4 years my wife and I will be moving there and putting up our last home and pole shed. If the 40 behind me comes up for sale I’ll buy it. It’s been one of the best investments I’ve ever made.
